Section 508(k) of the Federal Crop Insurance Act (7 U.S.C. 1508(k)) is amended by adding at the end the following:
“(10) ADDITIONAL EXPENSES.—
“(A) IN GENERAL.—Beginning with the 2026 reinsurance year, and for each reinsurance year thereafter, in addition to the terms and conditions of the Standard Reinsurance Agreement, to cover additional expenses for loss adjustment procedures, the Corporation shall pay an additional administrative and operating expense subsidy to approved insurance providers for eligible contracts.
“(B) PAYMENT AMOUNT.—In the case of an eligible contract, the payment to an approved insurance provider required under subparagraph (A) shall be the amount equal to 6 percent of the net book premium.
“(C) DEFINITIONS.—In this paragraph:
“(i) ELIGIBLE CONTRACT.—The term ‘eligible contract’—
“(I) means a crop insurance contract entered into by an approved insurance provider in an eligible State; and
“(II) does not include a contract for—
“(aa) catastrophic risk protection under subsection (b);
“(bb) an area-based plan of insurance or similar plan of insurance, as determined by the Corporation; or
“(cc) a policy under which an approved insurance provider does not incur loss adjustment expenses, as determined by the Corporation.
“(ii) ELIGIBLE STATE.—The term ‘eligible State’ means a State in which, with respect to an insurance year, the loss ratio for eligible contracts is greater than 120 percent of the total net book premium written by all approved insurance providers.
“(11) SPECIALTY CROPS.—
“(A) MINIMUM REIMBURSEMENT.—Beginning with the 2026 reinsurance year, and for each reinsurance year thereafter, the rate of reimbursement to approved insurance providers and agents for administrative and operating expenses with respect to crop insurance contracts covering agricultural commodities described in section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 108–465) shall be equal to or greater than the percentage that is the greater of the following:
“(i) 17 percent of the premium used to define loss ratio.
“(ii) The percent of the premium used to define loss ratio that is otherwise applicable for the reinsurance year under the terms of the Standard Reinsurance Agreement in effect for the reinsurance year.
“(B) OTHER CONTRACTS.—In carrying out subparagraph (A), the Corporation shall not reduce, with respect to any reinsurance year, the amount or the rate of reimbursement to approved insurance providers and agents under the Standard Reinsurance Agreement described in clause (ii) of such subparagraph for administrative and operating expenses with respect to contracts covering agricultural commodities that are not subject to such subparagraph.
“(C) ADMINISTRATION.—The requirements of this paragraph and the adjustments made pursuant to this paragraph shall not be considered a renegotiation under paragraph (8)(A).
“(12) A&O INFLATION ADJUSTMENT.—
“(A) IN GENERAL.—Subject to subparagraph (B), beginning with the 2026 reinsurance year, and for each reinsurance year thereafter, the Corporation shall increase the total administrative and operating expense reimbursements otherwise required under the Standard Reinsurance Agreement in effect for the reinsurance year in order to account for inflation, in a manner consistent with the increases provided with respect to the 2011 through 2015 reinsurance years under the enclosure included in Risk Management Agency Bulletin numbered MGR–10–007 and dated June 30, 2010.
“(B) SPECIAL RULE FOR 2026 REINSURANCE YEAR.—The increase under subparagraph (A) for the 2026 reinsurance year shall not exceed the percentage change for the preceding reinsurance year included in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.
“(C) ADMINISTRATION.—An increase under subparagraph (A)—
“(i) shall apply with respect to all contracts covering agricultural commodities that were subject to an increase during the period of the 2011 through 2015 reinsurance years under the enclosure referred to in that subparagraph; and
“(ii) shall not be considered a renegotiation under paragraph (8)(A).”.